the implications of urban road user charging for the

Competitive and Sustainable Growth Programme

The Implications of Urban Road User Chargingfor the Distribution of Goods by Road

Jo Baker,CUPID Project Manager

Transport & Travel Research Ltdwww.ttr-ltd.com


The Implications of Urban Road User Chargingfor the Distribution of Goods by Road

• Background

• How?

• Why?

• Where?

• Implications

• Other Issues

• Conclusions


Background

• PROGRESS will enable demonstrations

• CUPID provides support to PROGRESS

• EUROPRICE II will address political issues

• IMPRINT-EUROPE and MC-ICAM willlook at implementation of pricing reform

• DESIRE reviews inter-urban freight issues


How?

• Charging Strategy– Area-wide

– Cordon

– ERP by time/distance

– HOT lanes

• Charging Mechanism– Paper

– Electronic tag

– Video ANPR

– GPS/GNSS


How?

Copenhagen

Gothenburg

DistanceBased

Copenhagen

Gothenburg

RomeTime Based

Copenhagen

Gothenburg

TrondheimZone

(per trip)

Copenhagen

Gothenburg

GenoaBristol

Rome

Cordon

(per trip)

EdinburghArea Based

GNSSVideoElectronic TagPaper Based

Road Pricing Technology BasisSchemeConcept


Why? EC Policy

• Towards Fair andEfficient Pricing inTransport, 1995

• Fair Payment forInfrastructure Use, 1998

• High level group onInfrastructure Charging

• European Transport Policyfor 2010, 2001


Why? Motivation

Reduce Congestion

Raise Revenues

Improve Environment

Fair & Efficient Pricing?


Why? Economic Argument

Non-TransportCongestionAccidentsNoiseAir pollution

External Costs of Transport

External cost of transport in EC = 4.1% GDP

=Greece+Luxembourg+Finland+Portugal

Source:OECD et al:1994, EUROSTAT


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Where?

HelsinkiHelsinkiHelsinki

BristolBristolBristol

EdinburghEdinburghEdinburgh

TrondheimTrondheimTrondheim

CopenhagenCopenhagenCopenhagen

GothenburgGothenburgGothenburg

GenoaGenoaGenoa

RomeRomeRome

Also in France,Netherlands andother locations inthe UK and Norway


What are the Implications?Operational Issues

• Singapore

– Area licensing from 1975: 50% reduction in AM peakflows with 83% increase in bus patronage (1975 to1992)

– ERP from 1998: further 15% reduction in traffic

• Norway

– Toll cordons in Bergen, Oslo, Trondheim: reduction intraffic only 5-7%, main purpose to raise revenuesthrough modest tolls. Trials in Trondheim forCONCERT showed reductions of 10-17% with highertolls.


What are the Implications?Legal Issues

• Directive 1999/62/EC on Charging HeavyLoad Vehicles: charges limited toinfrastructure costs

• Transport Provisions of the EC Treaty:discrimination ill egal

• State Aid Provisions: avoid marketdistortions


What are the Implications?Technical Issues

• May require transponderor similar in car

• May need to pay inadvance for permit foraccess to urban area

• ERP requires morehardware

• London: purchase permitby phone, WWW orretrospectively


What are the Implications?Financial Issues

0

5

10

15

20

25

30

35

40

Car LDV HGV

CostsRevenues"Subsidy"

Source: Marginal Surface Transport Costs & Charges DETR 1998all average figures in pence/veh.km and include inter-urban costs


What are the Implications?Economic Issues

• Perceived operating costsmay rise

• True operating costs mayfall

• End-users may be moreaware of transport costs

• There may be an eventualchange in land-use orlogistics


Issues for International Hauliers

• As Eurovignette develops, tolling equipment may bestandardised and simplified and adopted in urbanareas

• Road Pricing proposals are unlikely to be morecomplicated that current arrangements of tolls, accessregulations etc

• Local load consolidation may become more attractive

• Fair and eff icient pricing may encourage shift awayfrom road and from long-distance haulage


Issues for National Hauliers

• Hauliers may initially feel threatened bylow-cost operations from other countries:tax harmonisation is required to ensurecompetitiveness


Issues for Local Deliveries• Local operators will be particularly affected

by toll cordons or ERP.

• Permit schemes will enable multiple access

• Local traff ic conditions may be enhanced

• There may be an incentive to change timeof day or improve loading factors

• Exemptions may be offered to cleanvehicles


Possible Timescale• 1975-1999: limited non-EC implementation,

selected trials in EC

• 2000-2004: selected demonstrations in EC(mainly UK, Italy, Scandinavia)

• 2005-2009: limited full -scale ECimplementation?

• 2010 onwards: increasing fiscalharmonisation, and implementation ofmarginal cost pricing?


Other Issues

• User Acceptance

• Social Equity

• Use of Revenues

• Institutions

• Politi cs


Conclusions

• Limited transferable experience

• Technical feasibil ity is largely proven

• Existing fiscal policies may be rationalised

• Fiscal rationalisation will avoid market distortion

• Implementation will be gradual

• Charges are unlikely to reflect full marginal costs

• Haulage market may contract as costs increase towardsfull marginal cost

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